So while earnings this quarter have topped expectations, those expectations were drastically reduced over the last few months.
And the earnings gains are largely a result of drastic cost-cutting, not significant increases in revenues. That shows companies have improved productivity, but haven't been able to grow their businesses through new customers or sales.
"Yes, many have been able to beat expectations, but the companies themselves haven't said that things have turned around yet," said Joe Cooper, a research analyst at Thomson First Call.
Look at Advanced Micro Devices, for example. Its stock has shot up nearly 50 percent over the last three months, and the computer-chip maker reported quarterly results that topped estimates.
But its loss for the quarter widened to 42 cents per share, compared with a loss of US$9.2 million, or 3 cents a share, in the same period last year. Sales were down nearly 21 percent from a year ago. And despite many cost reductions, AMD's executives backed off previous projections that the company would be able to break even by the end of the second quarter.
"What we see today ... is very difficult to call. The market is uncertain, stability is poor," AMD chief executive Hector Ruiz said in a conference call with analysts and investors to discuss earnings in mid-April.
So tech stocks surge, while the tech business struggles. Let's hope we aren't in for another bubble.
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